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Does government regulatory enforcement drive outcomes during an environmental emergency? California’s recent experience with drought provides an opportunity to examine the effects of enforcement actions on overall water conservation. Despite growing use of outdoor watering restrictions during periods of drought, and a corresponding literature measuring its effect, there is little evidence of the effectiveness of enforcement actions after the adoption of outdoor watering restrictions. What kinds of enforcement actions are used in practice? How do conservation enforcement actions affect water consumption?
Facing unprecedented drought conditions in 2014, the State of California ordered 25% statewide reductions in consumption by its largest local water utilities. Across the state, local governments adopted policies restricting residential irrigation, car washing, and other discretionary uses of water. Along with these restrictions, California local governments established enforcement regimes with informal notices, formal warnings, and escalating fines for violations. Over the course of the drought local water utilities issued hundreds of thousands of warnings and levied tens of thousands of penalties for violating water regulations.
Environmental enforcement is expected to affect outcomes in at least two ways. First, enforcement has a punitive effect by raising the cost of environmental damage. In the case of the California drought, financial penalties raise the cost of wasting water. Second, enforcement conveys information about public policies and community values. During the California drought, warnings and informal enforcement actions signaled communities about water supply conditions and local government conservation priorities.
Our analysis of monthly utility data from June 2014 through April 2017 shows that informal “follow-up actions” and formal warnings have substantial short-run positive effects on water conservation. The effects of formal penalties are mixed and negligible. Our results suggest that communicative management tools play a more influential role in reducing water use than economic penalties. Further, the negligible long-run effects of all three types of management tools indicate that policymakers probably cannot rely on enforcement actions to sustain conservation in the long run. Our results offer important findings for environmental policy generally, but especially for governments seeking to manage water consumption in drought-prone regions.